Between 2005 and 2008, Stryker Argentina, Stryker’s wholly-owned subsidiary in Argentina, allegeldy made 392 commission payments, or “honoraria,” to physicians employed in the public healthcare system in order to obtain or retain business with affiliated public hospitals. Unlike traditional honorarium payments that are made in exchange for the provision of a service, these honoraria were commissions that were calculated as a percentage of a total sale to a particular hospital and then paid to the public doctor associated with the sale. Stryker Argentina routinely made these payments by check to doctors at rates between 20% and 25% of the related sale. In total, Stryker Argentina allegedly made more than USD 966,500 in improper honoraria payments during the relevant period, causing Stryker Argentina to earn more than USD 1.04 million in profits from the public hospitals with which the doctors were associated.
In India, Stryker dealers are alleged to have issued inflated invoices to various hospitals, who then passed the invoices on to patients and their insurers for payment.
In China, Stryker’s wholly owned subsidiary did not properly vet, approve, or train over 21 sub-distributors and falsified records to hide the sub-distributors’ involvement in the sales process.
In Kuwait, from 2015 – 2017, Stryker’s primary Kuwaiti distributor made over US$32,000 in improper payments to Kuwaiti health care providers disguised as “per diems” to attend Stryker events, when Stryker had directly paid lodging, meal, and transportation costs for these individuals.
In 2007, Stryker Greece, Stryker’s wholly-owned subsidiary in Greece, allegedly made a sizeable and atypical donation of USD 197,055 to a public university to fund a laboratory that was then being established by a foreign official who served as a prominent professor at the university, and was the director of medical clinics at two public hospitals affiliated with the university. The donation was allegeldy made pursuant to a quid pro quo arrangement with the foreign official, pursuant to which Stryker Greece understood it would obtain and retain business from the public hospitals with which the foreign official was affiliated, in exchange for making the donation to the foreign official’s pet project. As a result of this donation, Stryker Greece earned a total of USD 183,000 in illicit profits.
Between March 2004 and January 2007, Stryker Mexico, Stryker’s wholly-owned subsidiary in Mexico, allegedly made three payments totaling more than USD 76,000 to Mexican foreign officials responsible for providing social security for government employees. Stryker allegedly made these payments to win bids to sell its medical products to certain public hospitals in Mexico. Stryker Mexico earned more than USD 2.1 million in profits as a result of these illicit payments. The payments were allegeldy made at the direction of Stryker Mexico employees, including country level management, and paid to the foreign officials through third party agents.
Between August 2003 and November 2006, Stryker Poland, Stryker’s wholly-owned subsidiary in Poland, allegedly made 32 improper payments to Polish officials for the purpose of obtaining or retaining business at public hospitals. In total, Stryker Poland allegedly made approximately USD 460,000 in unlawful payments resulting in more than USD 2.4 million of illicit profits. These improper payments were allegedly recorded in Stryker’s books and records as legitimate expenses, including reimbursement for business travel, consulting and service contract payments, and charitable donations
From at least 2003 through July 2007, Stryker Romania, Stryker’s wholly-owned subsidiary in Romania, allegedly made 192 improper payments to foreign officials totaling approximately USD 500,000 in order to obtain or retain business with affiliated public hospitals. As a result of these payments, Stryker Romania earned more than USD 1.7 million in illicit profits. Stryker Romania allegedly recorded these payments as legitimate sponsorships of foreign officials’ attendance, travel and lodging at conferences, and medical events, when in reality they were illicit payments made to obtain or retain business.
On 31 December 2012, media sources reported that Polish prosecutors in Katowice had conducted searches in dozens of residences and offices over the course of a few months, seeking evidence to support allegations that employees of Stryker Poland bribed hospital administrators between 2003 and 2006. The purpose of the alleged corrupt payments was to win contracts for the sale of Stryker products. Kickbacks were purportedly paid to 100 individuals at 51 hospitals.
Earlier in 2012, a separate bribery case was heard by a court in the city of Olsztyn in 2012. In that case, the lower court found a hospital director guilty of accepting bribes from Stryker. The appeals court overturned both the indictment and the prison sentence. The case is expected to be retried in 2013.
In 2007, Stryker disclosed that the U.S. Securities and Exchange Commission ("SEC") made an informal inquiry of Stryker regarding possible violations of the U.S. Foreign Corrupt Practices Act (FCPA) in connection with the sale of medical devices in certain foreign countries.
In 2008, Stryker received a subpoena from the U.S. Department of Justice ("DOJ"), Criminal Division, requesting certain documents for the period since 1 January 2000 in connection with the SEC's inquiry.
On 24 October 2013, Stryker consented and entered into SEC's Cease-and-Desist Order. As part of the agreement, Stryker has agreed to pay more than USD 13.2 million to settle the SEC's charges. The SEC's order requires Stryker to pay disgorgement of USD 7,502,635, prejudgment interest of USD 2,280,888, and a civil penalty of USD 3.5 million.
28 September 2018 - the SEC issued a consensual cease-and-desist order against Stryker Corp. for violations of the books and records and internal accounting controls provisions of Sections 13(b)(2)(A) and (B) of the Exchange Act. The violations stem from Stryker’s subsidiary operations in India, China, and Kuwait. The SEC found that Stryker’s internal accounting controls were not sufficient to detect the risk of improper payments in sales of Stryker products within these countries.
Stryker neither admitted nor denied the SEC’s findings and was ordered to pay a civil penalty of US$7.8 million and to retain an independent compliance consultant for at least 18 months to aid Stryker in remediation efforts.